Economics, not regs., are waging a war on coal

As EPA Chief Scott Pruitt prepares to roll back the Clean Power Plan, a new analysis challenges his assumptions about “winners and losers.”

The roll back makes good on Trump’s campaign promise to do away with restrictions on the coal industry. But even a drastic policy shift will likely not “put our miners back to work” or inoculate the coal industry against the economics now working against it.

Coal production in the United States decreased 33 percent from 2011 to 2016, and according to a recent Columbia University report, just 3.5 percent of that decline was due to environmental regulations. Even Rick Perry’s long-awaited Department of Energy report identifies cheap natural gas as “the biggest contributor” to coal plant closures.

Adding further evidence, an analysis from the Union of Concerned Scientists (UCS) found that 19 percent of coal-fired power is economically unviable compared to alternative energy sources such as renewables and gas.

The analysis compares the cost of electricity (fuel plus operating and maintenance costs) from each coal unit that produced retail electricity in 2016 to the cost of electricity from new and existing natural gas combined-cycle plants, new wind facilities and new utility-scale solar installations in the same geographic region. It considers a very specific portion of time, using current data and prices, as opposed to a long-range projection.

Retirements have been announced for 13 percent of the coal units UCS analyzed, but the study found that another 21 percent of units, totaling 57 gigawatts, were uneconomic compared to existing gas plants. The organization calls those units “ripe for retirement.”

The report also notes “a significant number” of marginally cost-effective coal plants that could become uneconomic with slight changes in coal or renewable energy prices.

As renewables continue to expand, members of the Trump administration may continue giving speeches about “winners and losers” in the power sector. But the energy winners have to compete effectively in the market, and coal is running into problems there even without a Clean Power Plan in effect.